Brief Exercise 109 Account Titles and Explanation Debit Credit Brief Exercise 10

Question

Brief Exercise 109

Account Titles and Explanation

Debit

Credit

Brief Exercise 109

Presented below is information related to Jones Department Stores, Inc. pension plan for 2015.
Accumulated benefit obligation (at year-end) $500,000 Service cost 440,000 Funding contribution for 2015 380,000 Settlement rate used in actuarial computation 9% Expected return on plan assets 8% Amortization of PSC (due to benefit increase) 90,000 Amortization of net gains 38,000 Projected benefit obligation (at beginning of period) 370,000 Fair value of plan assets (at beginning of period) 260,000

Explanation / Answer

Pension Expense Debit $ 981300

To Cash Credit $ 981300

Pension Expense Service Cost $440,000 Interest cost $33,300 (370000*9%) actual return on plan assets $380,000 Amortization of Prior service Cost $90,000 Net gains $38,000 $981,300

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